Dentsu reported a revenue gain but a drop in profit for the first nine months of the year. Revenue was up 11.7% to 657,143,000,000 Japanese yen, or nearly $5.8 billion at today’s exchange rate. Earnings before interest, taxes, depreciation and amortization fell 7.3% for the period to 106,873,000,000 yen (about $942 million).
Organic gross profit (revenue less direct costs) growth for the group fell 1% for the first nine months. The decline in Japan was 2.4%. For the Dentsu Aegis Network, which manages the firm’s operations outside of Japan, organic gross profits were flat for the period.
For the third quarter, organic growth fell 2.1% overall, 5% in Japan and 0.2% for DAN. Regionally, EMEA turned in the best Q3 performance with organic growth of 5.9%, while growth 2% in the Americas and 5.5% in Asia Pacific.
Dentsu CEO Toshihiro Yamamoto stated that “although market conditions remain challenging, the Group has continued to deliver strong new business momentum with some key global wins for Dentsu Aegis Network [including a big piece of the Anheuser-Busch InBev media business], which will be realized” in Q4 and next year.
Yamamoto added that “The Group continues to make strong progress against its digital ambitions, in Japan this includes our People Driven Marketing initiative. Dentsu Aegis Network delivered almost 60% of gross profit from digital and remains focused on delivering leading data driven marketing solutions to real people through the rollout of Merkle’s M1 data platform.”